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TMI Blog2016 (2) TMI 598X X X X Extracts X X X X X X X X Extracts X X X X ..... by the ld. Representative for the assessee, the non-refundable membership fee collected at the time of admission is in the nature of capital receipt, therefore, it cannot be treated as income of the assessee. Therefore, the CIT(A) is not justified in saying that the assessee is engaged in activity which is similar to commerce or trade. This Tribunal is of the considered opinion that the assessee is engaged only in promoting the sport of golf and receiving subscription, tournament fee, sponsorship fees etc. are in the course of its carrying on the charitable activity. Therefore, the activity of the assessee is not similar to commerce or trade. In this case, the object of the assessee is to promote the game of golf in the State of Tamilnadu. The benefits can be available not only for the members of the assessee-society but also non-members. Therefore, the beneficiaries cannot be identified. In fact, the object of the society enables to provide training and financial assistance to all individuals. In those circumstances, this Tribunal is of the considered opinion that the principles of mutuality is not applicable to the facts of this case. In view of the above discussion, this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o sec. 2(15) applies only to the institution which was set up for advancement of any object of general public utility and that carried out activity in the nature of trade, commerce or business. In this case, according to the ld. Representative, the assessee has not carried out any activity which is in the nature of trade, commerce or business. The activities of the assessee are incidental to the activity of promoting the sport of golf in the State of Tamilnadu, therefore, all the incomes are incidental to the charitable activity. The ld. Representative placed his reliance on the Circular issued by CBDT in Circular No.395 dated 24.9.1984 and the judgments of the Delhi High Court in India Trade Promotion Organisation vs DIT(E), 374 ITR 333, Institute of Chartered Accountants of India vs DGIT(E), 347 ITR 99, and the order of this Tribunal in Tamil Nadu Cricket Association vs DIT(E), 42 ITR(Trib) 546 4. The ld. Representative further clarified that the assessee has also claimed exemption on the principles of mutuality. According to the ld. Representative, no person can make a profit by himself. The assessee-society collects money from its members and provides certain facility to its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also contributing to the corpus of the assessee, therefore, it cannot claim exemption on mutuality. According to the ld. Representative, when the assessee was dealing with non-members and collecting fees from non-members also, the proviso to sec.2(15) would come into operation, therefore, the assessee is not eligible for exemption on the principles of mutuality also. The ld. DR further submitted that the assessee is collecting sponsorship fee for tournament, round fee, green fee etc. from members as well as non- members. Therefore, the CIT(A) has rightly found that the collection of sponsorship fee for tournament, round fee, green fee etc is more or less in the line of commercial activity, therefore, the proviso to sec. 2(15) would come into operation. Admittedly, the total receipt of the assessee exceeded ₹ 40 lakhs, therefore, the assessee-society cannot be construed as a charitable institution. 6. Referring to the claim of the assessee on the principles of mutuality, the ld. DR submitted that the object of the assessee-society is to provide benefits to general public in the State of Tamilnadu. There is nothing in the object to indicate that the benefits of the society ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 42,11,130 Total 3,55,92,060 8. The question arises for consideration is whether collection of sponsorship fee for conducting tournament, green fee for allowing non-members to use the golf ground would be an activity in the nature of trade or commerce? This Tribunal is of the considered opinion that sponsorship fee collected for conducting tournament and green fee for use of gold ground cannot be considered to be a commercial activity and therefore, it is not in the nature of trade or commerce. It may be a commercial advertisement for the individual or institution who is paying the sponsorship fee but as far as the assessee is concerned, the sponsorship fee received is an income incidental to the main activity of promoting golf in the state of Tamilnadu, therefore, at any stretch of imagination, the collection of sponsorship fee cannot be considered as commercial activity by the assessee. Similarly, the tournament fee, annual subscription fee, green fee, catering income, round charges etc. are incidental to the main activity of promoting the sport of golf. As rightly submitted by the ld. Representative for the assessee, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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